The approval of plans to build near a monument to victims of the Babi Yar massacre, where 34,000 Jews were killed in 1941, had been widely criticised.

Proponents had said the Ukrainian capital needed more hotels for the 2012 European Football Championships.

Mayor Leonid Chernovetsky's decision was welcomed by the Israeli government.

President Shimon Peres praised him for "having taken this just and important decision which preserves the memory of the Shoah [Holocaust] as an education for future generations".

The Yad Vashem memorial in Jerusalem said Mr Chernovetsky had clearly taken into account the protests of Jewish groups worldwide.